LONDON (Alliance News) - Highland Gold Mining Ltd. Wednesday said its pretax profit fell 46% in its first half as lower commodity prices and higher operating expenses hit the company.
The exploration-and-development gold mining company with operations in eastern Russia said its pretax profit fell to USD33.2 million from USD61.0 million for the six months ended June 30.
The company said sales fell 2.7% to USD157.0 million from USD161,453 million as the price of precious and other metal spot market prices decreased.
The company's cost of sales increased to USD108.0 million from USD99.8 million and operating expenses, linked to the impairment of the company's assets due to weak commodity prices, doubled to USD5.3 million from USD2.6 million.
Highland Gold also raised its production, with gold production increasing to 105,630 ounces from 101,900 ounces and the company maintained its full year production guidance of 225,000 to 240,000 ounces of gold.
During the period Highland Gold also paid USD207,000 to purchase the Kekura plant in the Chukotka region of Russia, where production is expected to commence in 2018.
After the half year, the company signed this month a USD100.0 million financial agreement with Sberbank.
Highland Gold shares were up 0.17% to 75.38 pence in early trading Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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